CONTENTS A COMMITMENT TO NATURALNESS MILESTONES IN GROWTH. Page 04 ORGANISATION AND STRATEGY. Page 12 OUR COMMITMENTS. Page 18 HIGHLIGHTS

Transcription

1 Annual Report 20 08

2 CONTENTS 2008 A COMMITMENT TO NATURALNESS Beginning of operations in Slovenia with Proconi 20 th anniversary of our partnership with Joël Robuchon Acquisition of Delta Dailyfood Canada With its unwavering focus on naturalness for greater taste and eating pleasure, the entire Fleury Michon community has embarked on a path of continuous improvement to deliver nature s best. New agreements signed in Spain and the United States Fleury Michon shares floated on the Paris market Page 04 ORGANISATION AND STRATEGY Fleury Michon is governed by two strategically-related bodies: The Supervisory Board, which focuses on growth strategy, and the Management Board, which ensures that the organisation operates efficiently. Page 12 OUR COMMITMENTS In its daily operations, Fleury Michon works hard to fulfil four key commitments: Commitment no. 1: Taste and pleasure Commitment no. 2: Nutritional value Commitment no. 3: Food safety and quality Commitment no. 4: Respect for people and the environment Page 18 HIGHLIGHTS Strategic alliance formed with Italy s Beretta Acquisition of Olida Partnership begins with chef Joël Robuchon Partnership begins with skipper Philippe Poupon Technology for fresh prepared meals Development of self-service charcuterie solutions MILESTONES IN GROWTH Each year, we invest heavily in the Fleury Michon brand and in innovation to meet emerging market trends. A look back at new products in 2008 and the events that shaped the year. Fleury Michon founded 1964 Page 22 KEY FIGURES Focus on Fleury Michon s main financial indicators in

3 HIGHLIGHTS IN FLEURY MICHON S HISTORY 1920s The Fleury Michon meat business was founded. 1930s The Company expanded into preserving and salt-curing pork. 1940s Industrial production began. 1950s & 1960s Pre-packaged ham was introduced in The Company developed self-service pork products for hypermarkets. 1970s Fleury Michon developed technology for refrigerated prepared meals. 1980s Production resources were redeployed to position Fleury Michon as a specialist in refrigerated products sold in supermarkets, hypermarkets and restaurants. The Company gradually withdrew from slaughtering and butchery. Fleury Michon linked up with the world of sailing by sponsoring skipper Philippe Poupon in The Company began its partnership with master chef Joël Robuchon in s Fleury Michon introduced surimi sticks and poultry cuts. The Company acquired Olida. Subsidiaries were set up in 1992, each focused on a specific business. Fleury Michon sold its salt-curing operations and refocused on its two core markets: Self-service charcuterie and prepared meals. The current visual identity was unveiled in s The Fleury Michon share was floated on the second market of the Paris bourse. The Group was reorganised with a Supervisory Board and Management Board. The advertising strategy was re-worked, with new advertisements and a new slogan. In southern Europe, Fleury Michon and Italian partner Beretta formed a joint venture to make prepared meals for the Italian market in The Company launched self-service restaurant and vending machine concepts, French-style fast food and travel catering to develop business in the eat-out segment. Fleury Michon acquired Fauchon s and Flo Prestige s delivered meals in A partnership was formed with Martínez Loriente in Spain to sell prepared meals in Mercadona supermarkets in Fleury Michon acquired Delta Dailyfood, a Canadian company that produces and sells frozen meals for supermarkets and catering, in Fleury Michon acquired an interest in Proconi, a Slovenian producer of prepared meals, in 2008.

4 04 ORGANISATION AND STRATEGY COMMITMENTS HIGHLIGHTS KEY FIGURES MESSAGE FROM THE CHAIRMEN Grégoire Gonnord Chairman of the Supervisory Board Fleury Michon will successfully meet the challenges of the global economic and financial crisis. At the beginning of 2009, the Supervisory Board appointed me Chairman of Fleury Michon. This gives me the opportunity to pay homage to my predecessor, my father Yves Gonnord, who led the Group from strength to strength over the past thirty years. I begin my term in the midst of a recession filled with numerous challenges for the food industry. Consumption has declined in certain markets, private labels and low-cost brands have gained ground on nationally known brands, suspicion of the food industry is widespread, margins have contracted and borrowing has become more difficult. Nonetheless, I face the future with confidence, as I know that Fleury Michon has what it takes to successfully meet these challenges. Our undeniable strengths include brand leadership in our markets; products offering superior taste, food safety and naturalness; R&D excellence and a proven ability to innovate; first-hand knowledge of our supply chains to ensure complete traceability; and careful monitoring of cost prices. Most important, we can count on our 3,700 team members and their daily commitment to giving customers the best of nature as we work together in a spirit of dialogue, respect and mutual trust to continuously adapt to our market and responsibly prepare our future. For all of these reasons and others too numerous to list, I am very confident in our Company s long-term outlook. The family majority shareholders that I represent are deeply committed to supporting and growing the business in the years ahead. Régis Lebrun Chairman of the Management Board Difficult years are a source of opportunity. The food market s growth came to a halt in 2008 as worried consumers drastically reduced their spending. The trends in our market segments were mixed. Although demand for surimi declined, sales of prepared meals and superior hams were stable and sales of poultry cuts and ready-to-eat charcuterie increased during the year. Projects outside France took longer than expected to start up, with a negative impact on sales and profitability. Overall, our strategic segments grew by 4.2 % and Fleury Michon brand business increased by 6.4 %. Consolidated revenue increased by 2 % over the year, but reduced demand and higher raw material and energy costs had a heavy impact on operating profit. Our diversified business portfolio helped us limit the decline to E7 million, and, fortunately, the second half was better than the first. Net profit attributable to equity holders of the parent decreased by E7.7 million in 2008 to E5.4 million. Although these results affect our growth capacity in the short term, the markets will restructure in the medium term, with the likelihood of a single nationally known brand by segment. Fleury Michon is the leader in its four strategic segments, giving us critical brand equity that we will continue to carefully nurture. We regularly assess our brand s strength and vibrancy. The current turbulence will create opportunities for players who are able to innovate, adapt, re-think their organisations, listen even more closely to shoppers needs and, above all, delight customers and consumers. Fleury Michon has weathered other storms throughout its long history. All of us are pulling together to make sure that the Group comes out of this recession even stronger than before.

5 ANNUAL REPORT FLEURY MICHON FROM LEFT TO RIGHT: Philippe Tharaud - Philippe Magdelenat - Nicolas Bertel Bruno Billy - Grégoire Gonnord (Chairman) - Pierre Jourdain Geneviève Gonnord - Nadine Deswasière Nicolas Le Chatellier - Yves Gonnord (Vice Chairman) Didier Pineau-Valencienne THE SUPERVISORY BOARD DISCUSSES STRATEGY AND SUPERVISES OPERATING MANAGEMENT The Supervisory Board discusses strategy, makes decisions, validates the Company s growth plan, supervises operating management and keeps a constant eye on the short and long-term interests of customers, employees, shareholders, partners and all other stakeholders... Chaired by Grégoire Gonnord, the Board includes family shareholders, two members representing employees and four independent experts. The Board s operating rules and procedures are defined in the corporate governance charter. To prepare issues ahead of meetings and facilitate decision making, the Supervisory Board is supported by a Strategy and Investments Committee, a Compensation and Appointments Committee and an Audit and Risks Committee. Strategy and Investments Committee This Committee, chaired by Grégoire Gonnord, includes two other Supervisory Board members. Its meetings are held in the presence of the Management Board. The Strategy and Investments Committee s main missions include devising strategy and reviewing acquisition projects. Compensation and Appointments Committee The Compensation and Appointments Committee proposes candidates for appointment to the Management Board, along with a suggested compensation package detailing the amount and type of remuneration. Audit and Risks Committee This Committee, made up of Philippe Magdelenat (Chairman) and another Supervisory Board member, is responsible for reviewing the financial statements and accounting procedures, as well as industrial, food, environmental, IT and other risks. THE MANAGEMENT BOARD FOSTERS COHESION AMONG THE SUBSIDIARIES The Management Board is the Company s executive body. It has three members with complementary backgrounds and experience. The Management Board is responsible for overseeing the Company s operations. It participates in establishing the three-year strategic plan, ensures that strategy is deployed effectively after approval by the Supervisory Board, fosters cohesion among the subsidiaries and upholds the Company s values. FROM LEFT TO RIGHT: Raymond Doizon (Vice Chairman), Régis Lebrun (Chairman), Jean-Louis Roy (Administration and Finance Manager) The Management Board is supported by an 11-member Management Committee, which manages operations in the subsidiaries and cross-functional departments and implements corrective measures when necessary. The three members of the Management Board are part of the Committee.

6 06 ORGANISATION AND STRATEGY COMMITMENTS HIGHLIGHTS KEY FIGURES DEVELOPMENT STRATEGY Our products are successful because they provide the right response to consumer expectations for naturalness to ensure taste and pleasure, convenience, affordability, nutritional balance and food safety. THE SOLUTIONS MEAL IT IS: Naturalness To ensure taste and pleasure Convenience Self-service products Nutritional value Optimal traceability, nutritional charter, ultra-clean plants Affordability Core products Our mission Our mission is to become an international benchmark for branded meal solutions that provide eating pleasure and naturalness in a way that is respectful of both consumers and ingredients. Naturalness to ensure taste and pleasure This continues to be the most important criterion for consumers. Thanks to our know-how and 20-year partnership with Joël Robuchon, Fleury Michon enjoys a wide lead over its rivals. Convenience We constantly adapt our products to changing lifestyles. Today s consumers spend less time shopping and preparing meals, and more time pursuing leisure and other activities. They are looking for practical, prepared solutions that are easy to open and quick to heat. We invest regularly to make our packaging and recipes more practical and convenient. Nutritional value and safety We take every measure possible to offer consumers innovative, convenient products backed by irreproachable standards of quality and safety. We devote 15 to 20 % of our capital spending to food safety and can ensure complete traceability for our products. Affordability We are developing a growing number of new products at even more affordable prices. Consumers are reducing their food spending as rising housing, energy and healthcare costs eat into their purchasing power. We offer affordable solutions for everyday meals, without ever compromising on quality.

7 ANNUAL REPORT FLEURY MICHON FRENCH SUPERMARKETS Provide more value added (naturalness, types of cooking, convenience, affordability). FRENCH EAT-OUT Develop growth sources to supplement supermarkets in France. INTERNATIONAL OPERATIONS SOUTHERN AND CENTRAL EUROPE Gradually settle in the Fleury Michon brand with partners through joint ventures. Outside Europe Licensing or direct investment. 3 STRATEGIC GROWTH PATHS Our growth strategy comprises three main paths: 1. French Supermarkets We have gradually focused our energies on pork hams and poultry cuts, prepared meals, surimi and ready-to-eat charcuterie, four core families that accounted for 84 % of sales in French Eat-Out The acquisition of Fauchon s delivered meals in late 2004 and the launch of our airline catering business have speeded our development in this strategic area, which accounted for 5 % of sales in International Operations International operations accounted for 9 % of sales in We are clearly committed to expanding in: - Southern and Central Europe through joint ventures, as in Italy and Spain. The goal is to develop the emerging local market for prepared meals and become the market leader. We have already achieved this objective in Italy, where Piatti Freschi Italia is the top-ranked brand. - North America, either through direct investments such as Canada s Delta Dailyfood or through technology licensing agreements, as in the United States. LOOKING TOWARDS THE FUTURE Our ambition for 2010 is to strengthen our leadership in French supermarkets, develop our presence in the French eat-out market and expand outside of France. We also intend to remain an independent, family-owned enterprise with the fourth generation at the helm. Some 60 % of the share capital is held by family shareholders. This is one of our main strengths and a source of long-term continuity for our projects and values.

8 08 ORGANISATION AND STRATEGY COMMITMENTS HIGHLIGHTS KEY FIGURES BUSINESSES In line with the Company s strategy, Fleury Michon s businesses are organised according to three growth paths: French Supermarkets, French Eat-Out and International Operations. Fleury Michon is led by a Supervisory Board, a Management Board and a Management Committee. To facilitate smooth operations throughout the Company, cross-functional departments, such as production, corporate communications, information systems, human resources, accounting and finance, support seamless processes and co-ordination by providing services both to the subsidiaries and at corporate level. Fleury Michon Logistique provides logistics services to the other member companies, from order intake to preparation and delivery. SYNERGY, CROSS-FUNCTIONALITY AND CO-ORDINATION FRENCH SUPERMARKETS FLEURY MICHON CHARCUTERIE 2008 revenue: million Workforce: 1,385 Business portfolio by product family: Pork hams and poultry cuts: 73 % Ready-to-eat charcuterie: 17 % Other charcuterie specialties: 10 % 4 production units Competitive position in supermarkets: No. 1 in pork hams and poultry cuts No. 1 in ready-to-eat charcuterie FLEURY MICHON TRAITEUR 2008 revenue: million Workforce: 1,367 Business portfolio by product family: Prepared meals: 60 % Prepared seafood: 39 % Other: 1 % 3 production units Competitive position in supermarkets: No. 1 in refrigerated prepared meals No. 2 in refrigerated surimi INTERNATIONAL OPERATIONS CANADA 2008 revenue: 26.6 million Delta Dailyfood (fully consolidated) 1 production unit Frozen meal producer acquired in September SPAIN 2008 revenue: 15.6 million Platos Tradicionales, joint venture with Martinez Loriente 1 production unit Range of refrigerated prepared meals sold in Spanish supermarkets ITALY 2008 revenue: 10 million Piatti Freschi Italia, 50/50 joint venture with Beretta 1 production unit Pioneer and leader in the Italian refrigerated prepared meal market SLOVENIA 2008 revenue: 5.4 million Proconi (fully consolidated) 1 production unit Refrigerated prepared meals for supermarkets and the eat-out market. UNITED STATES Fleury Michon technology licensed in the US to sell a range of prepared meals in supermarkets.

9 ANNUAL REPORT FLEURY MICHON e502.7 million in revenue FRENCH EAT-OUT e5.4 M in net profit attributable to equity holders of the parent PART OF FLEURY MICHON TRAITEUR Travel catering (rail, air, road and sea) Event catering (theme parks, trade shows, etc.) Traditional sit-down meals (restaurants, cafeterias, etc.) ROOM SAVEURS 2008 revenue: 9.6 million Workforce: 26 Leader in delivered meals to businesses under the Fauchon and Flo Prestige names. 3,702 employees 100% awareness of the Fleury Michon brand in France 11 production units, including 4 outside France CROSS-FUNCTIONAL BUSINESSES AND SERVICES 500 self-service and eat-out products FLEURY MICHON LOGISTIQUE 2008 shipments: 77,500 tonnes Workforce: 292 Responsibilities Processing and shipping orders for Fleury Michon subsidiaries. Managing finished product inventories Managing computer records in real time, from order to invoice, in liaison with production management Overseeing outsourced shipping Key Figures 5,000 orders a week - 850,000 packages a week 1,400 tonnes shipped each week - Service rate: 99.5 % FLEURY MICHON SA Services and support for the subsidiaries Administration & Finance Human Resources Corporate Communications Production Information Systems Service rate in France: 99.5 % ISO et IFS certifications

10 10 ORGANISATION AND STRATEGY COMMITMENTS HIGHLIGHTS KEY FIGURES NUTRITIONAL ADVERTISING Large scale campaigns targeted to consumers highlighted our nutritional partnerships with top professional athletes. We have opened a dedicated site at We informed nutritionists, dieticians and other healthcare professionals about our campaigns. OUR B WEBSITE Our corporate website: Expresses the Fleury Michon brand s values. Presents the breadth of our line-up. Includes interactive sections. Our brand is a major competitive advantage in France, where it enjoys 100 % awareness and an excellent image. Fleury Michon-brand products can be found in more than 65 % of French households. Our brand is a critical part of our equity. We deploy specific brand management tools through our brand charter and keep PRODUCT ADVERTISING We decided on a dual-media approach combining television commercials and billboard advertising. E6.3 million in ad spend in 2008

11 PACKAGING In 2008, 251 million consumer units were sold in France under the Fleury Michon name. ANNUAL REPORT FLEURY MICHON RAND a close eye on brand awareness and image content through regular, in-depth surveys. The concept of naturalness is particularly important as it covers supply Naturalness to ensure to taste and pleasure chains, recipes, production processes, nutritional qualities and more. With an awareness rating of 100 %, Fleury Michon is one France s leading food brands. MEDIA RELATIONS Journalists are informed about our advertising campaigns at press lunches and through press releases and press kits. Fleury Michon-brand products can be found in 65 % of French households IMAGE ADVERTISING Fleury Michon has produced and broadcast a short programme called Tous les Marchés du Monde since November SATURDAYS AND SUNDAYS AT AROUND 7:50 P.M.

12 12 ORGANISATION AND STRATEGY COMMITMENTS HIGHLIGHTS KEY FIGURES NATURALNESS CharteR A good daily diet is based on such key concepts as eating pleasure, taste, balanced nutrition and food safety. That s why Fleury Michon innovates for everyone who enjoys eating tasty, balanced meals ever y day, with a commitment to naturalness. As a meal solutions specialist, we have committed through our Naturalness Charter to an ethical, responsible approach designed to promote a natural, healthy and balanced diet that enhances taste and pleasure. The Naturalness Charter makes consumers a core concern. It represents a comprehensive approach with four key commitments: COMMITMENT NO. 1 Taste and pleasure COMMITMENT NO. 2 Nutritional value COMMITMENT NO. 3 Food safety and quality COMMITMENT NO. 4 Respect for people and the environment These commitments are at the top of each employee s mind day in, day out. With this Charter, the entire Fleury Michon community has embarked on a path of continuous improvement to deliver nature s best.

13 ANNUAL REPORT FLEURY MICHON COMMITMENT NO. 1 Taste & pleasure Mealtime with family or friends is a special moment when people can get together to talk about the day and enjoy each other s company. Fleury Michon offers authentic, natural flavours to make mealtime even more tasty and enjoyable. Rich flavours Research and development play a key role in Fleury Michon s growth strategy. Each year, we devote significant amounts to research to create even more flavourful recipes, as well as to development and innovation so we can respond to current consumer trends. EACH YEAR, WE RENEW 20 TO 30 % OF OUR LINE-UP Our R&D team of cooks and engineers renews 20 to 30 % of our line-up each year. To do this, we do not hesitate to put new colours in people s plates with accents from around the world or bring out updated versions of traditional recipes. We combine bullions, spices and aromatic herbs to bring naturalness, cooking methods, eating pleasure and balanced nutrition into perfect harmony. AN EXCEPTIONAL CHEF Our partnership with Joël Robuchon is based on shared values: the satisfaction of a job well done, a commitment to excellence, mutual respect and a preference for natural ingredients. As pioneers in innovation, Fleury Michon and Joël Robuchon, a recognised master craftsman and chef of the century, were the first to believe in and develop sous-vide cooking. Numerous inventive and refined dishes have grown out of our partnership, which began in Our relationship goes far beyond the Joël Robuchon signature. Joël gets involved personally in all stages of development, including: - the selection of ingredients «a good recipe requires superior, quality ingredients», as he likes to say. - the creation of new recipes, leveraging his outstanding expertise. - process design to conserve a product s initial quality. Photo : Patrick McMullan Joël has forged solid ties with our teams. Bringing in cooks with gastronomic backgrounds has strengthened this community spirit, because they speak the same language and share the same vision. We also converge in our desire to push the envelope and always do better.

14 14 ORGANISATION AND STRATEGY COMMITMENTS HIGHLIGHTS KEY FIGURES COMMITMENT NO. 2 NUTRITIONAL VALUE With the advice of Dr. Patrick-Pierre Sabatier, a nutritional expert, and the know-how of Fleury Michon s chefs, everyone can easily make balanced meals that are a joy to eat. Back in 1999, Fleury Michon actively deployed a nutritional approach designed to promote a varied, balanced diet with its products. This corporate commitment was aligned with France s national health and nutrition program (PNNS), which was launched to improve French people s health by focusing on balanced nutrition. Each of our new recipes is analysed to ensure the following: MEALS THAT ARE BALANCED AND ENJOYABLE TOO Compliance with daily recommended allowances of macronutrients and micronutrients All our recipes are devised to be part of a balanced diet, in accordance with daily recommended allowances of macronutrients (proteins, carbohydrates and fats), minerals, vitamins and fibre. Controlled fat intake We carefully monitor our products fat content to promote healthy eating and combat obesity. The fat content for each product family is limited and the type of lipid is selected based on quality criteria. Because fats are necessary for flavour, we use natural ingredients such as spices, condiments and aromatic herbs to ensure tastiness. We do not use palm oil or hydrogenated oils, but rather monounsaturated fats like olive oil or polyunsaturated fats such as rapeseed or linseed oil. As a result, 87 % of our prepared meals have a fat content of less than 10 %, and a third of them less than 5 %. All of our hams and poultry cuts contain less than 5 % fat and our steaks less than 10 %. Elimination of additives, flavour enhancers, colouring agents and other artificial ingredients Fleury Michon has taken the most active stance in the market in eliminating additives, flavour enhancers and texturising agents from natural products. We only use certain additives to resolve unavoidable technological or food safety constraints. As of today, nine prepared dishes out of ten are preservative-free, and all our prepared meals, hams and charcuterie products are made without artificial flavours. There are no polyphosphates in our pork hams, poultry cuts and prepared meals and no potential allergy-causing additives. Nutritional information on product packaging

15 ANNUAL REPORT FLEURY MICHON Diet is a critical factor in reducing and preventing obesity, diabetes, cardiovascular disease and other illnesses. We take stringent nutritional criteria into account from the product design stage to make sure that we deliver tasty, balanced choices to consumers, in keeping with official dietary recommendations. A PIONEER SINCE 1999 WITH THE FLEURY MICHON NUTRITION CHARTER Optimised salt content Fleury Michon blazed a new trail in 2001 by applying the French food safety agency s recommendations to its entire line-up. To optimise salt content, we use aromatic herbs, spices and condiments as a natural substitute. Thanks to this policy, 90 % of our prepared meals have a salt content of below 1 %. We have reduced the average salt content of our Plaisir et Equilibre line by 25 %, of our steaks by 18 % and of our chicken breasts by 16 %. Transparent, accessible nutritional information Because diet plays such a key role in public health, a major brand like Fleury Michon must live up to its responsibility by providing clear, transparent nutritional information. In practical terms, that means placing detailed nutritional labels and national health and nutrition (PNNS) recommendations on packaging, as well as on our website. We also inform healthcare professionals, dieticians, nutritionists and general practitioners about our commitments and our products nutritional quality. The Fleury Michon Scientific Committee Our Scientific Committee is made up of a dozen members from the fields of medicine, science and cooking who offer a wide range of expertise in health, nutrition and the culinary arts. It was set up to discuss and consider issues related to diet and health. Because diet plays such a key role in public health, a major brand like Fleury Michon must live up to its responsibility by providing healthy, balanced products.

16 16 ORGANISATION AND STRATEGY COMMITMENTS HIGHLIGHTS KEY FIGURES COMMITMENT NO. 3 Food safety & QUALITY We take every measure possible to offer consumers innovative, convenient products backed by irreproachable standards of quality and safety. For us, the concept of naturalness spans from raw materials to finished products. From pasture to plate We work closely with all players in the supply chain, including the pork industry, veterinarians and livestock and produce farmers. Supply managers are responsible for developing specifications and for setting up partnerships with producers and farmers covering all our purchases. Quality products require quality ingredients All meat-based ingredients comply with specifications established with the supplier. Detailed technical requirements have been drawn up for other ingredients. When a shipment arrives, we monitor its aspect and temperature and conduct microbiological analyses to verify compliance with specifications and ensure top quality. Clear traceability The quality assurance system applied at our sites is based on ISO and IFS standards, as well as compliance with best practices. Each step in the production process, from design to shipment, is carefully tracked and recorded. This is what is known as traceability. The batch number on all our packaging tells consumers where the product came from and provides specific details on production history, raw material origin, production processes, quality checks and shipping to the point of sale. Any non-compliant product can be recalled immediately. Our organisational system is guaranteed by ISO certification, and each year, the French quality assurance association (AFAQ) verifies that we are complying with the standard. We also deploy considerable human resources in-house to ensure maximum food safety. Dedicated Fleury Michon quality engineers focus on continuous improvement and proper application of procedures. At our in-house laboratory, we conduct: More than 145,000 bacteriological and chemical analyses per year on samples taken at all stages from raw materials to finished products. We also inspect our sites and equipment to eliminate any risk of contamination. Batch tests on the most potentially fragile products to verify analysis results before products are shipped. A RIGOROUS SELECTION PROCESS FOR RAW MATERIALS AND SUPPLIERS Daily tastings of all products to monitor taste, smell, aspect and other factors. Lastly, veterinarians and their assistants, seconded by the veterinary services department and overseen by the French Agriculture Ministry, regularly inspect all our production units.

17 ANNUAL REPORT FLEURY MICHON COMMITMENT NO. 4 RESPECT FOR PEOPLE AND THE ENVIRONMENT As a responsible corporate citizen, we take societal and environmental issues into account in our operations and relations with partners. Consumers and clients We do everything we can to guarantee optimum food safety and traceability so we can be sure that our products are healthy, safe and natural. This includes ensuring that our production units comply with the most stringent health and safety standards, that we deploy a rigorous quality policy based on ISO and IFS international standards, that we carefully select raw materials and secure our channels, that our employees are trained in health and safety practices and make this commitment their own, and that we leverage nutritional expertise to promote a diversified, balanced diet. Community Measures to combat diabetes and obesity are a public health priority in France. Because diabetes and diet are closely linked, we decided to support the therapy project of France s first diabetes school. To maintain a balanced daily diet and stay healthy, young diabetics need to enjoy what they are eating and that s what Fleury Michon is all about. This is also a pioneering initiative (another basic Fleury Michon value), as it is the first school of its kind, the first health-related publicprivate partnership and the first project combining a hospital and an association. Since 2006, we have also partnered with Terra, an association devoted to raising government and public awareness about humanity s ability to produce enough quality food to feed itself. Environment Environmental policy, coupled with sustainable development, is a constant concern at Fleury Michon. We are committed to growing our business while limiting our environmental impact and complying with regulations. A sustainable development manager is responsible for encouraging and sharing the good environmental ideas and practices deployed at each site. This brings all our employees and works council members fully into the process. Employees At Fleury Michon, business growth and social progress go hand in hand. Employee involvement is the best guarantee of quality and sustainability. To foster our team members involvement, we have committed to: Training. Our training budget is just over twice the legal requirement and higher than the average corporate contribution in France. Employee share ownership. Our employees hold more than 3 % of the issued capital. Adapting. We have signed an agreement concerning job opportunities for the disabled. Fleury Michon will continue to foster in-house solutions for employees who need to modify or change their positions for health reasons and to open up the workplace to job-seekers with impairments. Shareholders Since our initial public offering, we have always kept our promises. We demonstrate our commitment to transparency by providing regular shareholder updates on our website. Ethical investment funds have shown their confidence by acquiring shares in our Company.

18 18 ORGANISATION AND STRATEGY COMMITMENTS HIGHLIGHTS KEY FIGURES ADVERTISING MAIN EVENTS OF 2008 The two main advertising events for Fleury Michon in 2008 involved the production and sponsoring of a short television programme and a nutritional partnership with top athletes. The confidence in our products demonstrated by competitive athletes like the Bbox Bouygues Telecom cycling team and professional skippers such as Jean Le Cam, Marc Thiercelin and Michel Desjoyaux provides fantastic recognition of Fleury Michon s know-how. By putting our cooking and nutritional experience to work for highcalibre athletes, we give consumers added proof of our professional commitment and competence. SKIPPERS WHO PARTNERED WITH FLEURY MICHON IN 2008 In our more than 20-year partnership with Philippe Poupon and on several occasions with Olivier de Kersauson and Marc Thiercelin, we provided a varied range of products to meet the nutritional requirements of competitive skippers, as well as the specific constraints of sailboat racing (small storage spaces, no refrigeration), without compromising on taste or food safety. In all, we have put together 30 prepared meals with help from sports nutrition specialist Dr. Patrick-Pierre Sabatier and feedback from skipper Jean Le Cam. COMPETITIVE RACING, A SHOWCASE FOR OUR NUTRITIONAL KNOW-HOW Jean Le Cam Michel Desjoyaux Armel Le Cleac h Marc Guillemot Arnaud Boissière Vincent Riou Yann Elies Sébastien Josse Kito de Pavant Bernard Stamm Marc Thiercelin In 2008, we stepped up our nutritional partnership with cycling team Bbox Bouygues Telecom. Our Espace Nutrition travelling kitchen/restaurant is a first in the world of sports. The kitchen is fitted with professional equipment, while the restaurant offers a friendly atmosphere for teams to unwind and come together. We have devised a nutritional programme that provides each racer with tasty, individualised meals that respond to the needs of each type of race. The programme is based on Fleury Michon THE ESPACE NUTRITION, A UNIQUE CONCEPT products selected by Dr. Sabatier. photo: DPPI Régis Lebrun (right) gives the keys to the Espace Nutrition to Jean-René Bernaudeau in April Jean-René Bernaudeau, Cycling team s general manager I have wanted to use diet and nutrition to improve my racers performance for quite some time. Fleury Michon showed that it was the best partner for this project.

19 ANNUAL REPORT FLEURY MICHON Fleury Michon has moved into a new type of advertising by producing and sponsoring a short television programme that showcases typical marketplaces around the world. The farmers market is a universal symbol; in every corner of the world, marketplaces bring together people from all walks of life to shop, talk and share. The farmers market is also the perfect illustration of food in all its diversity, filled with freshness, authenticity, naturalness, exhilarating smells and tastes. As travellers well know, there is no better place to discover a country s people, customs, products and languages in a THE FARMERS MARKET: A U N I V E R S A L SYMBOL spirit of openness that fully reflects the Fleury Michon brand s values. The programme is broadcast on Saturdays and Sundays just before the highly watched evening news on TF1, one of France s leading channels. Over the long term, the brand will benefit by being associated with the values of the farmers market. To support the campaign, we have highlighted the programme on several million Fleury Michon products, published a travel guide and recipes from the show and put clips on a dedicated website.

20 20 ORGANISATION AND STRATEGY COMMITMENTS HIGHLIGHTS KEY FIGURES 3 Plaisir et Equilibre To delight consumers looking for a healthier, balanced diet, we added herb-coated roast pork filet with 25% less salt to the Plaisir et Equilibre line, alongside superior ham and poultry cuts. Faim de naturel The Faim de Naturel line now includes poultry cuts, as well as pork hams. In line with our Naturalness Charter, packaging information highlights the meat s origin and the ingredients naturalness. 20TH ANNIVERSARY RECIPES In 2007, we celebrated 20 years of partnership with master chef Joël Robuchon. Recipe ideas submitted by consumers in the 20 th Anniversary competition led to two new dishes in 2008: white cod with green curry and fruity rice, by Philippe, and rabbit curry with Thai rice, by Emilie. NEW PRODUCTS We invest heavily in innovation to meet emerging market trends. Each year, we renew 20 to 30 % of our line-up. Rôtisserie Fleury Michon has launched a delicious, innovative line of grilled and spit-roasted meats. These ready-to-eat products may be served cold or quickly re-heated in a microwave, with four tasty pork and poultry recipes offering a variety of choices for a virtually homecooked meal. Thanks to the slow roasting process, the meats are tender, satisfying, full-flavoured and golden brown. They also re-heat well, for a pleasurable eating experience. EXOTIC CUISINE Fleury Michon has added global accents to mealtime with three new dishes inspired by recipes from North Africa (lamb meatball kebabs with spiced couscous), India (tandoori kebabs with bulghar) and the French West Indies (fish-cake skewers with creole rice).

21 ANNUAL REPORT FLEURY MICHON JAMBON DE PARIS Fleury Michon s wet-cured, boneless ham made from French pork contains 25 % less salt. Good tasting and good for you, our traditional Jambon de Paris recipe is sold in 2- and 4-slice packs. Cassolettes Three mashed potato casseroles have been added to this mix and match range: blood sausage Parmentier, duck and porcini mushroom Parmentier and beef and spring vegetable Parmentier. Served in 180-gram earthenware dishes, these flavourful casseroles open a new chapter in bold creativity. Try them one at a time or combine different recipes for an evening of culinary discovery among family or friends. The cassolette range has also been expanded on the gourmet end with two new recipes: Parslied scallops with broccoli flan and Nordic salmon with zucchini flan and goat s cheese. These recipes are served in stackable earthenware dishes featuring brand new colours. RECIPES SELECTED SAVEUR DE L ANNÉE 2009* Chicken yakitori skewers with poppy-seed rice Chicken tandoori kebabs with bulghar Oven-browned chicken breast slices *Monadia survey: Products tasted and rated by a panel of 180 consumers between june and september Organic meats Fleury Michon has combined its culinary expertise with organic farming to offer a flavourful new pork roast for consumers concerned about sustainable development. Bistrot Inspired by the Parisian bistrot, these dishes are geared to consumers looking for traditional French comfort food. Recipes include braised pork with prunes and mashed potatoes, coq au vin with casareccia pasta and roast chicken with tarragon. CœUR FRAIS Building on the popularity of our cheese-filled Coeurs Frais surimi sticks, we have added new stuffings such as salmon with cheese and mayonnaise. SPIT-ROASTED HAM Slow roasting makes for a flavourful, mouthwatering ham, with irregularly shaped slices enhancing the visual impact of authenticity. CREATIVE CHARCUTERIE The creative charcuterie range has been expanded with thin-sliced bacon, gizzards and chicken in convenient twin packs (2 x 75g). These special or light meal ingredients add a tasty touch to salads, as well as to hot and cold dishes.

22 22 ORGANISATION AND STRATEGY COMMITMENTS HIGHLIGHTS KEY FIGURES FLEURY MICHON KEY FIGURES REVENUE BY BUSINESS (in %) Pork hams and poultry cuts French supermarkets accounted for 84 % of revenue in International business represented 9 %, including Fleury Michon s share in joint ventures. The French Eat-Out market contributed 5 % and various nonstrategic businesses the remaining 2 %. FRENCH SUPERMARKETS 84% OTHER 2% INTERNATIONAL 9% FRENCH EAT-OUT 5% REVENUE BY STRATEGIC FAMILY(in %) Prepared meals Surimi Revenue up +6.4% IN 2008 Strategic products accounted for 93 % of total revenue in 2008, up two points from the year before. PREPARED MEALS 21% PORK HAMS AND POULTRY CUTS 39% OTHER 7% FRENCH SUPERMARKET REVENUE GENERATED BY FLEURY MICHON BRAND (in %) SURIMI 15% READY-TO-EAT CHARCUTERIE 9% BUSINESS DEVELOPMENT 9% Revenue up +7% IN 2008 OTHER 16% FLEURY MICHON BRAND 84% Ready-to-eat charcuterie Fleury Michon-brand products generated 84 % of the Group s French supermarket revenue, an increase of four points from 2007.

23 ANNUAL REPORT FLEURY MICHON FINANCIAL RESULTS Consolidated revenue rose 2.1 % in 2008 to E502.7 million. Growth was driven by sales of strategic products (prepared meals, surimi, pork hams and poultry cuts and ready-to-eat charcuterie), which gained 6.4 % in a period of weakening demand both in France and abroad. Recurring operating profit totalled E15.3 million. After a difficult first half, recurring operating profitability improved in the second half. The Charcuterie and Prepared Meals businesses did well over the full year. Although operating margin narrowed slightly, it held up well in a less favourable business environment. Consolidated operating profit was impacted by results from new subsidiaries with insufficient sales and by operating difficulties at Canadian subsidiary DDFC. At E3.6 million, finance costs and other financial income and expense-net reflected Fleury Michon s rising debt and changes in interest rates since The Group s share in the profits and losses of associates was negative, at E1.5 million, primarily due to development expenses for Spanish joint venture Platos Tradicionales. Net profit attributable to equity holders of the parent came to E5.4 million for the full year REVENUE (in millions of euros) RECURRING OPERATING PROFIT (in millions of euros) CASH FLOW (in millions of euros) NET PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT (in millions of euros)

24 24 ORGANISATION AND STRATEGY COMMITMENTS HIGHLIGHTS KEY FIGURES CONSOLIDATED BALANCE SHEEET at 31 December 2008 (in thousands of euros) ASSETS NON-CURRENT ASSETS 202, ,505 Goodwill 45,777 47,298 Intangible assets 1,765 2,078 Property, plant and equipment 144, ,708 Non-current financial assets 2,318 2,608 Investments in associates 7,912 6,563 Deferred tax assets CURRENT ASSETS 197, ,527 Inventories and work in progress 43,730 49,936 Trade receivables 80,668 80,652 Other receivables 31,086 32,417 Current financial assets Cash and cash equivalents 41,969 40,502 TOTAL ASSETS 399, ,032 LIABILITIES AND EQUITY CONSOLIDATED EQUITY 144, ,902 Share capital 15,543 15,543 Additional paid-in capital 35,050 35,050 Reserves and retained earnings 80,565 84,873 Profit for the period 13,029 5,359 Minority interests NON-CURRENT LIABILITIES 65, ,935 Long-term provisions 9,211 9,064 Long-term borrowings 46,029 85,713 Deferred tax liabilities 7,965 8,953 Other non-current liabilities 2,441 2,193 CURRENT LIABILITIES 189, ,830 Short-term provisions Short-term borrowings 35,132 30,530 Trade payables 98, ,035 Other payables 56,103 51,265 TOTAL EQUITY AND LIABILITIES 399, ,032

25 ANNUAL REPORT FLEURY MICHON CONSOLIDATED PROFIT AND LOSS ACCOUNT Year ended 31 December (in thousands of euros) REVENUE 492, ,689 Materials cost of sales (229,592) (238,419) Employee benefits expense (135,745) (140,942) External costs and other operating income and expenses - net (70,703) (75,341) Taxes other than on income (10,664) (10,943) Depreciation, amortisation and provisions (24,438) (23,695) Change in work in progress and finished product inventories 331 1,943 RECURRING OPERATING PROFIT 21,450 15,292 Other income and expenses - net 0 (317) OPERATING PROFIT 21,450 14,975 Finance costs - net (1,776) (3,276) Other financial income and expense - net 493 (274) Income tax expense (6,509) (4,556) Share in profits and losses of associates (601) (1,506) NET PROFIT 13,057 5,363 Net profit attributable to equity holders of the parent 13,029 5,359 Net profit attributable to minority interests 28 4 Earnings per share (in euros) Earnings per share excluding treasury stock (in euros) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY TOTAL SHARE Capital CAPITAL RESERVES TREASURY STOCK OTHER RESERVES AND RETAINED EARNINGS At 31 December (in thousands of euros) EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT MINORITY INTERESTS At 1 January ,543 35,050 (9,245) 95, , ,821 Amounts directly recognised in equity (26) 802 Net profit for the year 13,029 13, ,057 Translation adjustments Purchases and sales of treasury stock (4,264) (4,264) (4,264) Dividends paid during the year (2,794) (2,794) (2,794) At 31 December ,543 35,050 (13,509) 107, , ,252 Amounts directly recognised in equity (315) (315) 8 (307) Net profit for the year 5,359 5, ,363 Translation adjustments (3,210) (3,210) (3,210) Purchases and sales of treasury stock (1,738) (1,738) (1,738) Dividends paid during the year (2,945) (2,945) (2,945) Changes in Group structure (513) (513) (513) At 31 December ,543 35,050 (15,247) 105, , ,902

26 26 ORGANISATION AND STRATEGY COMMITMENTS HIGHLIGHTS KEY FIGURES CONSOLIDATED STATEMENT OF CASH FLOWS Year ended 31 December (in thousands of euros) CASH FLOWS FROM OPERATING ACTIVITIES Net profit attributable to equity holders of the parent 13,057 5,363 Depreciation, amortisation and provisions 23,640 23,746 Other non-cash income and expense items (611) (3,432) Net (gains) and losses on disposals of assets (133) 665 Share in (profits)/losses of associates 601 1,248 CASH FLOW AFTER FINANCE COSTS NET AND INCOME TAX EXPENSE 36,554 27,590 Finance costs - net 1,776 3,276 Income tax expense (including deferred taxes) 6,509 4,556 CASH FLOW BEFORE FINANCE COSTS NET AND INCOME TAX EXPENSE 44,839 35,422 Income tax paid (5,181) (6,804) Change in operating working capital (4,991) (5,573) NET CASH PROVIDED BY OPERATING ACTIVITIES 34,667 23,045 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of property, plant and equipment and intangible assets (36,238) (41,522) Proceeds from the disposal of property, plant and equipment and intangible assets Acquisitions of financial assets (366) (362) Proceeds from the disposal of financial assets Effect of changes in Group structure 0 (1,855) NET CASH USED BY INVESTING ACTIVITIES (35,123) (43,582) CASH FLOWS FROM FINANCING ACTIVITIES Purchases and sales of treasury stock - net (4,264) (1,738) Dividends paid (2,794) (2,945) Proceeds from new borrowings (including finance leases) 14,755 51,751 Repayments of borrowings (including finance leases) (9,158) (12,106) Interest paid - net (1,776) (3,276) Fair-value adjustments to financial instruments recognised directly in equity (944) Net change in employee profit-sharing reserve (432) (1,171) NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES (3,669) 29,571 +/- Impact of change in exchange rates 61 2,365 CHANGE IN CASH AND CASH EQUIVALENTS (4,064) 11,399 Cash and cash equivalents at beginning of year 24,368 20,304 Cash and cash equivalents at end of year 20,304 31,703

27 2009 INVESTOR CALENDAR 2008 revenue 29 january financial results 20 april 2009 First-quarter 2009 revenue 20 april 2009 Annual General Meeting 25 june 2009 ANNUAL REPORT FLEURY MICHON First-half 2009 revenue 29 july 2009 First-half 2009 financial results 31 august 2009 Third-quarter 2009 revenue 28 october 2009 Average monthly trading volume in 2008: 968 shares Shares outstanding at 31 December 2008: 5,095,924 At the Annual Meeting of 25 June 2009, shareholders will be asked to approve a dividend of E0.53 per share HIGH E LOW E22.00 Financial documents, press releases and other information are posted on INVESTOR INFORMATION SHAREHOLDER STRUCTURE AT 31/12/08 FAMILY % PUBLIC % TREASURY STOCK 8.30 % EMPLOYEES 3.80 % NOTES

28 Fleury Michon - BP POUZAUGES CEDEX - FRANCE PHONE: (2) FAX: (2) infos.finances@fleurymichon.fr Fleury Michon Corporate Communication - May Design: Agence Marlow (0) ref